ALP 15

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2.3 Acquisition of Water Supply.
2.3.1 Determination of Purchase Price. Within 15 days after exercise of the Option,
the Authority shall provide the Purchaser with a notice setting forth the Purchase Price due to the
Authority at closing. This amount shall be the total of the Water Charge and the Specific Cost
Charge, each calculated as follows:
2.3.1.1 The Water Charge shall be the sum of the Base Water Charge and the
Additional Water Charge, if applicable. The Base Water Charge shall equal the number of acre feet
of annual depletion optioned herein (1,900 acre feet), divided by 2,600, and then multiplied by
$6,674,350, or $4,877,409. The Additional Water Charge shall equal the number of acre feet of
annual depletion optioned herein, divided by 2,600, and then multiplied by that portion of additional
Joint Project Costs included in the Additional Repayment Obligation actually determined for the
ALPD Depletion Allocation (e.g., 3.07% of Joint Project Costs that exceed $217,287,950 and are
reasonable and unforeseen).
2.3.1.2 The Specific Cost Charge. The Specific Cost Charge shall be the sum
of the Specific Cost Charge on account of General Items of Specific Cost, and the Specific Cost
Charge on account of Special Items of Specific Costs. The Specific Cost Charge on account of the
General Items of Specific Costs shall equal the total number of acre feet of annual depletion
acquired, divided by 2,600, and then multiplied by the total cost of General Items of Specific costs
for the ALPD Depletion Allocation, including the General Items of Prepaid Specific Costs. The
Specific Cost Charge for Special Items of Specific Costs shall equal the total cost of Special Items of
Specific Costs that benefit the Purchaser.
2.3.2 Relinquishment of ALPD Depletion Allocation. The Purchaser may elect to
relinquish that portion of the 1,900 acre feet of ALPD Depletion Allocation optioned herein assigned
to the Additional Water Charge, as determined in accordance with Paragraphs 8 and 9 of the Funding
Agreement, by delivering notice of such relinquishment as a part of the notice of exercise of option
in Paragraph 2.2.4 above. If the Purchaser does elect to relinquish that portion of the ALPD
Depletion Allocation optioned herein, then the Purchase Price shall be reduced by the amount of the
Additional Water Charge that would otherwise apply to the 1,900 acre feet of annual depletion
optioned herein, the Purchaser shall not be obligated to pay such Additional Water Charge, and the
relinquished portion of the ALPD Depletion Allocation shall be available for acquisition from the
Authority by other water users, or for relinquishment by the Authority pursuant to Paragraph
8(b)(2)(iii) of the Funding Agreement. Purchaser shall nevertheless remain responsible for payment,
as a part of the Purchase Price, of the entire Specific Cost Charge attributable to the ALPD Depletion
Allocation acquired.